ISB repayment will be made via SL Foreign Reserves

ISB repayment will be made via Sri Lanka's foreign reserves; State Min. Cabraal

by Staff Writer 01-10-2020 | 12:33 PM

Colombo (News 1st); Outflows in 2021 would be around USD 4.5 Billion while the next ISB repayment of USD 1 Billion is due in July 2021 said State Minister of Money & Capital Market and State Enterprise Reforms, Ajith Nivard Cabraal told on Wednesday (30th September).

Responding to journalists during a media briefing at the Finance Ministry, Cabraal said the government has '' enough time '' for repayment and several steps to raise funds are currently underway.

He added the ISB repayment due on the 4th of October 2020, will be paid via Sri Lanka's foreign reserves, which reached USD 7.4 Billion by the end of August 2020.

'' There are ample reserves to make that payment '' the State Minister said.

Outlining the government's plans to raise funds in the domestic and foreign markets, the State Minister said the government envisages to raise 1.5 Trillion Rupees via treasury bonds and bills, 100 Billion rupees via Sri Lanka development bonds, 75 billion rupees in FCBUs and seek support from multilateral organizations such as the World Bank & the Asian Development Bank.

Sri Lanka is expecting a 700 Million USD loan from China and, Samurai & Panda bonds to boost dollar inflows in 2020, Cabraal said

When inquired regarding the USD 1 Billion SWAP arrangement between Sri Lanka and India the State Minister said '' we will announce the time we are ready. But there is a process that is going on.''

He added that the government has gone quite a distance in the case of the Samurai bonds and initial work has been done with regard to the panda bonds.

'' Once we have examined the terms that could be made available to the government, the government will take a call in consultation with the central bank, and that could arise very sooner than later,'' he said.

The State Minister said Sri Lanka has many options available to raise finance, including ISB issuance and a fresh agreement with the IMF, and '' will take a call at a time the markets are favorable to all.''

The government expects a budget deficit of 9 percent in 2021 and Sri Lanka's debt stock is envisaged to be brought down to below 70 percent against GDP.

Secretary to the Treasury S.R. Attygalle said that the budget deficit also includes carried forward dues of the previous government.

'' The government had to pay Rs.242 Billion, which is more than 2 percent of GDP. As at yesterday, we had repaid Rs. 226 Billion'' he said.